Creating a budget as a couple with two different salaries

How do you create a budget as a couple when you don’t earn the same
salary? One couple shares their experience and how they conquer the
challenges that can come with this type of situation.

Do the math

The first step when budgeting
as a couple, after having calculated their income, is to make a list
of recurring expenses that will be shared by the partners, as well as
personal expenses. Among the shared expenses, you should generally
include rent or mortgage-loan payments, as well as services such as
electricity, Internet, etc. You should also calculate items that you
purchase to share, such as groceries or car payments.

Maude and Jonathan*, a political advisor and self-employed worker,
equally split the payments for rent, electricity, Internet and cable,
as well as groceries and small purchases for their apartment (kitchen
utensils, small appliances, etc.).

Make decisions together

There are many ways for a couple to separate expenses. For couples
who do not earn the same salary, it’s often more efficient to divide
some bills 50/50 and split other expenses proportionally to each
person’s salary.

From the beginning, these two decided to split recurring expenses
50/50. “We divide all the shared expenses equally, and then each pay
for our own personal expenses,” explains Jonathan. “The fact that our
rent is very affordable (at $680) allows us to divide the expense
equally. I can easily afford it, even if I earn almost half [of
Maude’s salary].”

When they began to manage their finances together as a couple,
Jonathan’s salary was even lower. At that time, he earned around
$30,000 a year, while Maude’s income was around $90,000, so Maude
furnished their apartment. “She bought the appliances, the sofa,
living room and kitchen furniture… almost everything. If it had been
me, I would have bought used furniture, but she preferred to pay for
more comfort,” continues Jonathan.

Now that his salary is higher, Jonathan can contribute to larger
purchases. For example, the couple purchased a new oven and a mattress
together. If one day they decide to move to a more expensive
apartment, Maude would agree to pay for more than half of the rent.

The couple could then decide to separate expenses according to their
salaries. By basing this on a percentage of the total household income
earned by each person, it is easy to determine what their contribution
is when paying for expenses.

For example, when Maude was making around $90,000 a year and
Jonathan, $30,000, their household income came up to $120,000. Maude’s
salary made up 75% of their income, while Jonathan’s was 25%. If they
paid their monthly $680 rent proportional to their salaries, she would
have paid $510 per month and he would have paid $170. This type of
calculation can be adapted for all shared expenses and remains a
practical method for couples with a salary gap.

Don't look any further

Pay worry-free

Once you’ve established the known recurring expenses and who will pay
for what, all that’s left to do is… pay.

Some people opt for a joint
account into which each person transfers the money needed for
shared expenses. Others prefer to make payments themselves and then
ask their partner to transfer their contribution. Many couples choose
to use a combination of these two methods.

There are several
different scenarios, but for Maude and Jonathan, she takes care
of paying the rent, while he pays the electricity bill. The Internet
payment is charged to a shared credit card.

In contrast, for many couples, large shared expenses, such as the
rent or mortgage, are paid from a joint account, and other expenses,
such as groceries, are paid with a shared credit card.

Equip yourself with the right tools

For couples to reimburse each other, cash is always an obvious
option, but there are many quick and efficient digital
tools that can help you send money and stick to your budget.

Maude and Jonathan regularly use online tools to manage their budget.
“We often send Interac
e-transfers when the other person has paid for something. If one
of us goes to the grocery store, we pay with our shared credit card,
and the other reimburses their half with an online transfer.” This
allows them to more easily monitor their expenses and split them fairly.

If you prefer cheques, a digital
cheque deposit using a photo is another solution. Simply
download the mobile
app, then follow the steps to quickly deposit cheques wherever you are.

Regardless of the salary gap between two partners, there is always a
way to agree on a shared budget. The important thing is that you
decide on a way to separate expenses and properly communicate with
your partner. Then, simply use the online tools to keep things running smoothly.

*Names have been changed

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